Commerce Department awards $9.1M for computer facilities management, with limited competition

Contract Overview

Contract Amount: $9,114,353 ($9.1M)

Contractor: Chenega Systems, LLC

Awarding Agency: Department of Commerce

Start Date: 2023-11-01

End Date: 2026-10-31

Contract Duration: 1,095 days

Daily Burn Rate: $8.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: COMPUTER FACILITIES MANAGEMENT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20230

State: District of Columbia Government Spending

Plain-Language Summary

Department of Commerce obligated $9.1 million to CHENEGA SYSTEMS, LLC for work described as: COMPUTER FACILITIES MANAGEMENT SERVICES Key points: 1. Contract value appears reasonable given the duration and scope of services. 2. Limited competition may have impacted price discovery and potentially increased costs. 3. Performance risk is moderate, typical for IT infrastructure support services. 4. This contract supports essential IT operations within the Department of Commerce. 5. The IT services sector is highly competitive, making limited competition notable. 6. The firm fixed-price contract type shifts some risk to the contractor.

Value Assessment

Rating: good

The contract value of $9.1 million over three years for computer facilities management services seems within a reasonable range for a federal agency of the Commerce Department's size. Benchmarking against similar IT support contracts is challenging without more specific service details, but the price per year ($3.04M) is not immediately indicative of overpayment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a limited competition scenario. This suggests that only one or a very small number of responsible sources were considered capable of meeting the government's needs. While this can be efficient for specialized requirements, it limits the government's ability to leverage a broader market to drive down prices and ensure the best possible value.

Taxpayer Impact: Limited competition can lead to higher prices for taxpayers as the government may not benefit from the full range of competitive offers and innovation that a more open bidding process could generate.

Public Impact

Federal employees within the Department of Commerce will benefit from reliable IT infrastructure and support. Essential computer facilities management services, including maintenance and support, will be delivered. The geographic impact is concentrated in the District of Columbia, where the agency is located. The contract supports IT professionals and potentially other roles involved in maintaining the agency's digital operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential price inflation and reduced innovation.
Lack of detailed service descriptions makes it difficult to fully assess value for money.
The 'NOT AVAILABLE FOR COMPETITION' status warrants further investigation into the justification for limited sourcing.

Positive Signals

Firm fixed-price contract type helps control costs and manage budget predictability.
The contract duration of three years provides stability for essential IT services.
The contractor, Chenega Systems, LLC, is likely experienced in providing such services to the federal government.

Sector Analysis

The IT services sector is a vast and dynamic market within the federal government, encompassing a wide range of support functions. Computer facilities management is a critical component, ensuring the operational integrity of agency IT infrastructure. Spending in this area is consistently high across federal agencies, with significant competition typically seen for large-scale contracts. However, specialized or urgent needs can sometimes lead to limited competition awards.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The focus appears to be on fulfilling the agency's direct IT facilities management needs. Without set-aside provisions or explicit subcontracting goals, the direct impact on the small business ecosystem for this specific award is likely minimal, though the prime contractor may engage small businesses as part of their broader operations.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Commerce's contracting officer and program managers. Accountability is managed through the firm fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through federal procurement databases like FPDS, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Infrastructure Support Services
Data Center Operations
IT Operations and Maintenance
Cloud Computing Services
Cybersecurity Services

Risk Flags

Limited competition may result in suboptimal pricing.
Lack of detailed performance metrics in summary data.
Justification for 'NOT AVAILABLE FOR COMPETITION' needs review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $9.1 million to CHENEGA SYSTEMS, LLC. COMPUTER FACILITIES MANAGEMENT SERVICES

Who is the contractor on this award?

The obligated recipient is CHENEGA SYSTEMS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (Office of the Secretary).

What is the total obligated amount?

The obligated amount is $9.1 million.

What is the period of performance?

Start: 2023-11-01. End: 2026-10-31.

What is the specific justification for awarding this contract on a 'NOT AVAILABLE FOR COMPETITION' basis?

The justification for a 'NOT AVAILABLE FOR COMPETITION' award, often referred to as sole-source or limited competition, typically stems from unique capabilities, urgent requirements, or the unavailability of other responsible sources. For this contract, the specific reason would need to be detailed in the Justification and Approval (J&A) document filed with the award. Without access to this document, it's impossible to definitively state the rationale. However, common reasons include proprietary technology, existing infrastructure integration challenges, or a critical need for continuity of services from a proven provider to avoid significant disruption. The Department of Commerce would have had to formally document and approve this justification to proceed with a non-competitive award.

How does the annual cost of this contract compare to similar IT facilities management contracts at other federal agencies?

Directly comparing the annual cost of $3.04 million for this contract to similar IT facilities management contracts at other federal agencies is challenging without detailed service level agreements (SLAs) and scope of work (SOW) for each. However, general benchmarks for IT infrastructure support can be considered. For a contract of this nature, covering facilities management which often includes hardware maintenance, data center operations, and potentially some network support, the cost appears to be within a typical range for a federal agency. Larger agencies with more extensive infrastructure might spend significantly more, while smaller agencies might spend less. The 'NOT AVAILABLE FOR COMPETITION' status, however, suggests that a direct apples-to-apples comparison with competitively bid contracts might show this one to be at a higher price point due to the lack of market pressure.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this computer facilities management contract. Typically, such contracts would include detailed metrics related to system uptime, response times for issue resolution, hardware maintenance turnaround times, data center environmental controls (temperature, humidity), and security compliance. The performance of Chenega Systems, LLC would be evaluated against these agreed-upon metrics. The firm fixed-price nature implies that meeting these SLAs is crucial for the contractor to achieve profitability, and failure to do so could result in penalties or contract deficiencies, though the specifics would be outlined in the contract's statement of work.

What is the track record of Chenega Systems, LLC in providing similar IT facilities management services to the federal government?

Chenega Systems, LLC is a known entity within the federal contracting space, often associated with providing a range of services including IT, logistics, and facilities management. While specific performance details for this particular contract are not yet available as it is newly awarded, the company has a history of securing and performing on government contracts. A deeper dive into their past performance records, available through federal procurement databases, would reveal their success rates, any past performance issues or commendations, and the types of IT services they have previously delivered. Their ability to win this contract, even on a limited competition basis, suggests they met the agency's initial vetting criteria.

What is the historical spending trend for computer facilities management services at the Department of Commerce?

Analyzing the historical spending trend for computer facilities management services at the Department of Commerce requires access to multi-year procurement data. This contract, awarded in late 2023, represents a new expenditure. To understand the trend, one would need to examine previous contracts for similar services awarded by the Department of Commerce over the past several fiscal years. This would involve looking at the total amount spent annually on IT facilities management, the number of contracts awarded, and whether those awards were competitive or sole-source. Such an analysis would reveal if spending in this category is increasing, decreasing, or remaining stable, and whether the Department is increasingly relying on limited competition for these services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10505 FURNACE RD STE 205, LORTON, VA, 22079

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $9,114,353

Exercised Options: $9,114,353

Current Obligation: $9,114,353

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline